What is a budget?
A budget is a listing of your income and expenses with the goal of making your total income be equal to or greater than your total expenses.
What does a budget do?
A budget can give you control and help you decide what’s important ahead of time.
A budget helps you create a savings plan so you’ll know what it will take to meet your goals.
A budget helps you track your expenses so you’ll know where your money goes.
A budget helps you make decisions by reminding you of your goals.
Why should you budget?
Budgets help you manage your money. They help you plan for your future, and they can ensure that you are able to make ends meet.
How do you set up a budget?
Choose a time frame for your budget. Monthly budgets are most common.
Estimate your income and your expenses. Categorize your expenses to fit your needs, such as: savings, charity, clothing, entertainment, personal items, loan payments, gas, etc. The “Sample Budget” to the right is a guideline to show you how to set up your income and expenses. This is just a guideline – your categories and the amounts you assign to them may be quite different.
Set savings goals (such as education, car, vacation) and figure out how much you need to save each week or month to achieve those goals. Remember to put money in savings first. If you wait to save what is leftover, your savings account may never get to where it needs to be to achieve your goals.
After the first month, review your budget by comparing your actual spending to the amounts you budgeted. Revise your budget if you need to make it more realistic.
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Categories: Budgeting, Education, Finances